Wall street plunges amid surge in Robinhood

Wall street plunges amid surge in Robinhood

On Wednesday, U.S. equities dropped after private-sector jobs data came in lower than expected. In a mixed day for the stock market, the Nasdaq composite managed a little rise on the back of Robinhood surge.

Robinhood (HOOD) surged 50% and finished 85% than its IPO price of $38 per share. The no-commission trading software plummeted as low as $33.25 during last week’s first public offering. However, it has become a topic of discussion on Reddit’s Wallstreetbets forum this week, and ARK Innovation ETF (ARKK) and ARK Fintech Innovation (ARKF) have revealed big purchases of Robinhood shares.

In July, the ADP private payroll survey revealed a gain of 330,000 jobs, considerably below the average expectation of 653,000. The official jobs data from the Labor Department, which has a greater influence on markets, will be issued on Friday.

Overall, profits and economic statistics for the second quarter have been good, but some investors are concerned that the recovery from last year’s epidemic would be slowed.

Quick market analysis

The S&P 500 index was down 0.5%, while the Dow Jones Industrial Average was down 0.9%. Also, volume on the NYSE and Nasdaq increased.

The Communications Services Select Sector SPDR ETF (XLC) gained 0.3% thanks to a 2% surge in Facebook (FB) shares.

After the manufacturer failed profit projections for the second quarter, shares of General Motors dropped 8.9%, impacting on the broader market. The carmaker did boost its profit forecast for the remainder of the year.

The oil industry fared the worst, falling 2.7%. The price of Nymex crude declined $2.41, or 3.4%, to $68.15 a barrel, marking the third straight drop.

According to the Energy Information Administration, oil stockpiles in the United States increased by 3.6 million barrels in the final week of July. Oil prices have already been under pressure due to fears that increasing Covid-19 delta variant infections may stymie the economy’s recovery.

After briefly falling below 1.13 % earlier in the morning, the 10-year Treasury yield was trading flat at 1.18 % on Wednesday. Lower bond rates have established a more negative tone for stocks in recent weeks, sparking fears about the pace of the economic recovery, but that link appeared to break down.

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